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Big Banks are "Cheating" Shareholders

A former bank exec makes the case.

In recent months, the case has been made again and again for the breaking up of major banks. While much of the argument has centered on whether Glass-Steagall would have prevented the financial crisis, another, more present argument is that shareholders are being kept from the returns that these banks could be earning if their value-generating divisions were allowed to step out from under the shadow of investment banking. Is management cheating big-bank investors?

The caseIn a rare moment of usefulness, CNBC interviewed former Morgan Stanley chief Phil Purcell, where he made what I think is the strongest case yet for the break-up of the major banks -- Bank of America(NYSE: BAC) and Citigroup(NYSE: C).

Author

Michael is a value-oriented investment analyst with a specific interest in retail and media businesses. Before coming to the Fool, Michael worked with private investment funds focusing on deep value and special situations. Currently living in the media capital of the world--Los Angeles, California.